Summary of “How Business Titans, Pop Stars and Royals Hide Their Wealth”

Minimizing TaxesMr. Simons, the hedge fund billionaire, was a young math professor in 1974 when a Colombian friend established a trust in Bermuda on his behalf using a gift of $100,000 to him, his parents and his descendants. American tax authorities would consider the Lord Jim Trust, as it was named, a foreign entity, limiting the visibility of the Internal Revenue Service into its holdings and its ability to tax its funds until it made distributions to the Simons family. In 1982, Mr. Simons founded Renaissance Technologies, a New York-based hedge fund whose secret trading algorithms soon generated rates of return that became storied on Wall Street. Mr. Simons, in response to questions, said that when he and his family received distributions from the Bermuda trust, they were reported to the I.R.S. But Mr. Simons said he and his relatives took out only limited amounts, mainly in the early years of the trust, whose main investments were Renaissance funds that enjoyed spectacular returns. As the tax dispute has proceeded, Mr. Simons is now estimated to be the 25th-richest person in the United States, with a net worth estimated at $18.5 billion, according to the Forbes list of richest Americans. Factoring the trust into his wealth isn’t so straightforward, because Mr. Simons says his share is now in an offshore charity, Simons Foundation International. Mr. Simons said that keeping the foundation in Bermuda made it easier to give to charities that weren’t American and also avoided the minimal annual giving requirements that foundations must follow in the United States. Michael G. Pfeifer, a Washington lawyer who specializes in estate planning for wealthy people and helped write the tax rules governing overseas trusts, said that Mr. Simons merely followed the rules.